Skip to content

Irving Picard is also going after Tim Teufel

Feb 19, 2011, 10:01 AM EDT

Nationals Mets Baseball

The Wilpons and Saul Katz have some familiar company in this Madoff mess.

According to Andy Martino of the New York Daily News, former Mets second baseman and current Triple-A Buffalo manager Tim Teufel is being sued for approximately $1.23 million in a clawback lawsuit filed by Madoff trustee Irving Picard.

According to the Daily News, the lawsuit alleges that Teufel reaped $1,219,463 in “fictitious profits” and made $13,000 from a different Madoff account.

Teufel, who is currently in spring training with the Mets as an instructor, had some brief comments on the matter for Adam Rubin of ESPN New York this morning:

“The whole thing here for me at this point is kind of in a place where people are taking care of this and I really can’t comment in a big way on anything [with] my involvement with the Madoff scandal at this point,” Teufel said. “But what I try to do professionally is not bring my personal life into the clubhouse. So I hope you guys can respect that part. I’m here to develop players, help them get to the big leagues. Being able to do the [Triple-A] Buffalo team this year, I’m excited about that, and am thrilled to be a part of something real big here. So I enjoy my job, and my time here with the Mets has been great. I feel for the Wilpon family with what they have to go through. I can certainly relate to their pain and anguish. So I’m here to leave my personal attitude and effects of what has happened in my family’s life out of the clubhouse and help develop players.”

As opposed to the lawsuit against the Wilpons and Katz, Picard is not alleging that Teufel knew or should have known about any illegal activity.

  1. Old Gator - Feb 19, 2011 at 11:24 AM

    Picard, of course, will make a fortune off this second tier of innocent victims the son of a bitch is creating. Why doesn’t someone just go buy an bungstarter and put this parasitic piece of shit Picard in his place?

    • paperlions - Feb 19, 2011 at 11:53 AM

      Yeah, I hate when people do the job to which they are appointed by the court. I can’t believe this guy is trying to get property that doesn’t belong to people back so that it can be re-distributed to the rightful owners, what an asshole.

      • chrisny3 - Feb 19, 2011 at 1:17 PM

        Except that in the case of the Wilpons, Picard is overreaching. And “rightful owners” is not a cut-and-dried thing when you’re dealing with a ponzi scheme that went on for decades. This is also a unique case where the law on “rightful owners” may change and continue to develop for years and years as all the individual cases involved get resolved.

      • Old Gator - Feb 19, 2011 at 2:47 PM

        How do you distinguish a guy like Teufel who invested in good faith and may now be bankrupted so that someone else who invested in good faith and lost their money can be paid back a fraction of what they lost while Picard pockets 40% or more of the recovery? Get real. All this is, is shifting the condition of victimage from one group of innocents to another while enabling a middleman to get rich in the process.

      • paperlions - Feb 20, 2011 at 8:53 AM

        It doesn’t matter if someone invested in good faith. If Madoff gave you back more money than you “invested”, then you are in possession of stolen property and will be asked/told to return it….just like any other “good faith” transaction in which someone unwittingly purchased stolen property.

    • luckywi - Feb 19, 2011 at 4:13 PM

      Old Gator you are clearly ignorant on this topic. Picard is doing his job. And was appointed to the position. And he’s stealing nothing.

      • Old Gator - Feb 19, 2011 at 5:21 PM

        Well now wait a minute. Is this “stolen money” or is it not? Is Picard being paid a percentage of this money that he recovers for “doing his job,” or is he not? Does “recovering” stolen money and putting 40% of it in your pocket in the process make it un-stolen money? Yeah, you’re right. I don’t understand this. But I doubt if it would nauseate me any less if I did.

        And of course – it is easier to make victims of people who invested in good faith in order to give their money to other victims who invested in good faith and differed from the first set of victims who invested in good faith only in their timing, than it is to, say, recover the money that Madoff hid away for himself and his family, isn’t it? All Picard has done is target the sitting ducks. He’s not only a legally sanctioned thug and a louse, he’s a lazy one at that.

    • luckywi - Feb 19, 2011 at 5:32 PM

      Old Gator: You are clearly ignorant on this topic. It’s not Timmy Tuefeels fault, but that’s money from a crime. If you weent to a pawn shop and bought something that turned out to be hot, you would have to give it back. Very simple. I’m not sure how this guy is a parasite. It was well stated when it was pointed out he was APPOINTED by the COURT. Perhaps you need to find your place.

  2. Chris Fiorentino - Feb 19, 2011 at 12:15 PM

    “Picard is not alleging that Teufel knew or should have known about any illegal activity.”

    If this is true then why should Teufel have to pay money that he may have already spent in good faith? So if I earn money on my investments, I better wait to spend it in case it was illegitimate? Ridiculous. I could see if, as in the case I’d the Madoffs, they are saying they should have known. Then by all means take it all back. However, if they admit upfront that the person did nothing wrong, it is sad that somebody may legitimately have their life harmed because of someone else’s illegal activity. I feel for the Madoff victims, but not enough to pillage those people who had no knowledge of his wrongdoing.

    • Chris Fiorentino - Feb 19, 2011 at 12:16 PM

      Holy typos!!!!! Madoffs = Wilpons.

    • Reflex - Feb 19, 2011 at 12:48 PM

      If you buy stolen property you still have to return it, and won’t get your money back. Not knowing something was stolen is not a defense.

      • PanchoHerreraFanClub - Feb 19, 2011 at 12:59 PM

        And if you are an honest, innocent person you return the stolen property when you find out it was stolen. Or you can go with the Wilpons defense, “Finders keepers, losers weepers”.

      • Chris Fiorentino - Feb 19, 2011 at 1:21 PM

        This is TOTALLY different than buying a pair of earrings off some guy on the street. This is honest investing with no knowledge at all of Madoff’s scheme. What if fidelity suddenly went under and lost people a trillion bucks. Would I responsible to pay back the 50,000 I made on my investments the last 3 years? Ridiculous.

      • chrisny3 - Feb 19, 2011 at 1:26 PM

        The Wilpons are not saying “Finders keepers, losers weepers.” They are merely asking to be treated fairly under the law. That’s the very least any of us should expect from the justice system.

      • Old Gator - Feb 19, 2011 at 2:54 PM

        And when Teufel becomes the victim of Madoff via the agency of the profit-skimming louse Picard, will Picard then turn around and sue the people he turned over maybe half of the money he recovered to in order to give it back to the victims of Madoff he just created himself, and having done that, will he then turn around and re-sue the original non-victim he made a victim in order to partially recompense the original victim whom he made a victim again by grabbing back the money to give it back to the original non-victim-now-victim? I think even those of you born without one lobe or another can see the inherent absurdity in this situation, not to mention its gratuitous cruelty towards perfectly honest individuals.

        And who, pray tell, can keep skimming off each exchange of this sort and putting it in his own pocket without ever having to worry about being accused of profiteering from everyone else’s misery?

        Did someone say “Irving Picard”????

        Good heavens!

    • Old Gator - Feb 19, 2011 at 2:43 PM

      So we find ourselves on the same side of an issue at last. What an odd feeling. But disgust with our so-called legal “system” generally transcends ideological boundaries anyway.

      • PanchoHerreraFanClub - Feb 19, 2011 at 5:46 PM

        I guess most people don’t think that if you profit from another’s dishonesty you shouldn’t have to pay your dishonest profit back if you acted in good faith. Madoff didn’t go bust. He set up a confidence scheme.

        One more example. A theif steals a car. A second person in good faith buys the car and then sells it to you for $15K. The car is discovered as stolen and police take from you and return the car to its rightful owner. The second guy gets to keep your $15K, right? No, you sue him to get your $15K. That is all that is happening in the Madoff case.

  3. seeingwhatsticks - Feb 19, 2011 at 4:14 PM

    No one is saying Teufel has to give back all of his money, just the profits off of what he “invested” because those aren’t investment profits. The “profits” he “earned” are really just the initial investments made by other investors. The goal here is to restore as much of the money that was originally invested to those who originally invested it and to spread the damage out as much as possible. Do you really think it would be more fair if some lost everything while others actually turned a profit?

    • Chris Fiorentino - Feb 19, 2011 at 5:31 PM

      When you invest money, you take a chance that you will lose it. The problem here is that Teufel earned the money legitimately as far as he knew, much like you or I would earn money by investing with Vanguard or Fidelity. How would feel if you pull money from your IRA to buy a house or add an addition to your house, them were told Vanguard did something illegal and you have to pay back those profits? I think it would probably piss you off like this should piss off Teufel. Like I said…I sympathize with those people who lost with Madoff but taking money from people who did nothing wrong is not the way to fix the problem.

      • seeingwhatsticks - Feb 19, 2011 at 5:35 PM

        But it wasn’t a legitimate investment. The money wasn’t invested in anything, therefore the normal rules about risk don’t really apply. This wasn’t a case where a fund or a company or a stock went belly up, the money was basically stolen. Why should some involved profit while others lose everything?

      • phillysoulfan - Feb 20, 2011 at 8:55 AM

        What part of that there was no investment made do you not understand? If you invest in Vanguard or Fidelity, you are making a legitimate investment. You lose what you invest. In Madoff’s case, there were NO INVESTMENTS. Madoff took money from one person and gave it to another, calling it a profit. That’s a crime in this country. Tim Tueffel, Katz, and the Wilpons have no legitimate claims to that money. It was stolen.

        Also, you can not keep money made off of money from ill begotten gains. So any money that the Wilpons and company used that was received from Madoff that they later turned into another profit (i.e. investing in the NY Mets), they have to return that as well. That’s where Picard is making his money, Gator.

  4. paperlions - Feb 20, 2011 at 9:07 AM

    Where in the world do people get the idea that Picard pockets 40% of the money he recovers? Law Firms are paid for their work but get no percentage of what is recovered.
    .
    “In the Madoff case, SIPC has shouldered all the administrative expenses,” said Stephen Harbeck, president and CEO of SIPC. “Any money that Picard and his firm has recovered goes 100% into the customer property pool. Customer property is never used to pay legal fees.”
    .
    And not everyone is trying to keep their stolen money like the Wilpon’s are: “n December, Picard and Preet Bharara, U.S. Attorney for the Southern District of New York, cleared a major hurdle in dealing with Madoff’s mess. They announced a $7.2 billion settlement with Barbara Picower, the widow of Jeffry Picower, considered the biggest beneficiary of Madoff’s scheme. According to the trustee, Picower had withdrawn $7.8 billion from Madoff’s firm since the 1970s, even though he only deposited $619 million. His widow agreed to hand over the difference, $7.2 billion, to benefit Madoff’s victims, many of whom were left destitute in the wake of his fraud.”
    .
    Some people are honest, some people are not.

  5. chrisny3 - Feb 20, 2011 at 9:33 AM

    Where in the world do people get the idea that Picard pockets 40% of the money he recovers? Law Firms are paid for their work but get no percentage of what is recovered.

    While it’s true he doesn’t get a percentage, his bills have been HUGE. He submitted a bill for him and his hand-selected large staff of $30 million in December of 2009 — that’s just for a year of work. By the time this is over including appeals, maybe in 3-4 years, his total bill is likely to be over $100 million.

    And not everyone is trying to keep their stolen money like the Wilpon’s are

    That is patently false and shows your ignorance of the matter. The Wilpons are willing to give back profits, as long as they are FAIRLY calculated, they just don’t believe it is fair for Picard to go after their principal.

    According to the trustee, Picower had withdrawn $7.8 billion from Madoff’s firm since the 1970s, even though he only deposited $619 million. His widow agreed to hand over the difference, $7.2 billion

    Picower gave back net profit, not the principal. Even though Picower was actually in Madoff’s closest inner circle of friends — unlike the Wilpons. The Wilpons were friends with Madoff but not as close the Picowers.

    So trying to paint the Picowers as honest and the Wilpons as not is ludicrous. Especially when they profited from Madoff so much more than the Wilpons.

    • paperlions - Feb 20, 2011 at 9:41 AM

      I find it hard to believe that there would be a lawsuit against the Wilpons if they were willing to give back their profits as Picower did. I have seen it written no where that the Wilpons offered to give back all ill-gotten gains. I imagine the Wilpons are not able to give back the stolen money in which they are currently in possession because they are so highly leveraged and can afford to pay the money back and continue to operate their holdings without selling something off.
      .
      Of course, they are so highly leveraged, that it seems unlikely there would be sufficient profits to pay off the money they owe if they did sell the Mets.

      • paperlions - Feb 20, 2011 at 9:42 AM

        * can’t (not can) afford to pay the money back…

      • chrisny3 - Feb 20, 2011 at 10:01 AM

        You really need to read up on things before posting.

        First off, there was a lawsuit against the Picowers too. His widower just decided to settle a few months ago.

        Second, Picower is alleging only 300 million in profit by the Wilpons. He is going after an additional 700 million and that is why the first settlement talks fell through, primarily because he was overreaching to get back MORE THAN PROFIT.

        Have you seen it anywhere written that they are not willing to give back “net profit” as fairly calculated under the law?

        Of course, they are so highly leveraged, that it seems unlikely there would be sufficient profits to pay off the money they owe if they did sell the Mets.

        Not necessarily true. Depends on what they owe and they dispute Picard’s lawsuit. If it ends up they owe what they think they owe, then paying off the lawsuit won’t impact them at all. If it ends up they owe what Picard is saying they owe, they may have to sell the entire team. If it’s somewhere in between, they would probably only have to sell a minority share in the team to pay it off. No big deal.

      • chrisny3 - Feb 20, 2011 at 10:04 AM

        Also, you should know that according to reports, Picower’s rates of return from Madoff were through the roof and much higher than what the Wilpons and most other investors got back.

        Further, Picower was a very successful and smart businessman. So if some say the Wilpons should have known, then Picower should have known even more, because he was just as savvy and actually closer to Madoff than the Wilpons.

        So your attempt to paint Picower as honest and the Wilpons as not is ludicrous.

      • chrisny3 - Feb 20, 2011 at 10:05 AM

        “Second, Picower is alleging only 300 million in profit by the Wilpons.”

        Meant to say Picard there.

      • paperlions - Feb 20, 2011 at 11:52 AM

        Well, Picower died and paid $7.2MM. Wilpon’s refusal to have a heart attack probably incensed Picard, who clearly slapped a $700MM value Wilpon’s life.
        .
        No one has ever said that the Wilpon’s are the only ones that should have known Madoff’s “investments” was a scheme. A lot of people so strongly suspected that they refused to invest with him and warned other people. In any case, other people’s ignorance has not bearing on the fact that either 1) the Wilpon’s did not perform due diligence when investing large sums of money, or 2) they did so, realized it was a scheme and didn’t care because they needed the money.

      • chrisny3 - Feb 20, 2011 at 1:06 PM

        I didn’t say you said that the Wilpons were the only ones who should have known. What I took issue with in your post was the ludicrous comparison of Picower (and his estate) with the Wilpons, saying the Picowers were “honest” and the Wilpons were not.

        First off, Picower’s estate didn’t settle till more than a year after he died and 1-1/2 years after Picard field his suit against the Picowers. You wrongly assumed that there was no lawsuit against the Picowers and that they freely gave back, supposedly showing they were honest when in fact they didn’t settle for at least 18 months after a lawsuit was first filed. Second, what the Picowers gave back was all “net profit” whereas there is every indication the Wilpons were willing to give back “net profit” but were rightly balking at giving back principal. So the cases couldn’t be more different. Especially when you consider other facts as well, such as Picower being among Madoff’s closest friends and his investment returns being astronomical compared to other Madoff investors including the Wilpons.

        As for saying there were “a lot” of people who “so strongly” suspected and warned other people, that is not accurate. Yes, there were some who actually warned the SEC that it was a ponzi scheme, but the SEC didn’t do a thing, and the Wilpons would have no way of knowing about warnings to the SEC. And the few so-called “red flags” that Picard put in his lawsuit against the Wilpons don’t rise to the level required to investigate an investment. For example, Merrill simply wouldn’t condone “black box” investing strategies, but such investing is perfectly legal.

        There is simply no evidence in Picard’s mostly empty lawsuit against the Wilpons that they either knew it was a ponzi scam or received sufficient warning that it was such, and therefore requiring “due diligence” to embark on an investigation.

      • chrisny3 - Feb 20, 2011 at 9:08 PM

        See my 6:08 pm comment right above.

        I asked you a question, the inference of which contradicts your previous statement that the Mets farm system is “empty.” You totally ignored the question.

        Of course I read the link. Whether or not the organization is in disarray is totally irrelevant to whether or not the farm system is empty or full or half-empty. (Nor does it have anything to do with whether or not there are financial resources available to the team.) Nice of you to try to go off on a tangent, now that I’ve shown that people who know much more about baseball than you pretend to disagree with you.

        If I keep making the same points over and over, what do you think you’re trying to do? The sad part is you keep on trying, even after you’re proven wrong (ie, the timeline of Picard’s unethical PR campaign and the breaking off of negotiations). And most of your points are your own speculation vs. reality or facts. As I said, we can all speculate all day long. Big deal.

        And stop saying you’re so bored. Prove it. I think you know how.

  6. sanzarq - Feb 20, 2011 at 3:09 PM

    Anyone who invested with the Madoff scheme and collected any “profits” is subject to be sued, and rightly so. I don’t think these suits are asking for anything more than the “profits” made from Madoff transactions. If any Madoff investor subsequently used those “profits” to invest in something else, which did not pan out, for whatever reason, is irrelevant. Teufel should pony up, along with all the other idiots who ivested with the scumbag Madoff family. If he goes bankrupt, who cares? He needs to cough up the dough he didn’t really earn.

    As an aside, if someone doesn’t hang Madoff upside down by his gonads until he expires, then he’s still getting off lightly.

    • chrisny3 - Feb 20, 2011 at 3:19 PM

      Actually, in some of his lawsuits — for example the ones against the Wilpons and Chase — Picard is going after more than net profits.

      He is not doing that with Teufel. Also, it should be noted, that it appears he did NOT sue everyone who had net profits with Madoff. He selectively filed lawsuits, which is his right as a trustee.

      • seeingwhatsticks - Feb 20, 2011 at 3:39 PM

        Are they going after more than net profits? Because it sounds like the Wilpons folded all their net profits back into their businesses (including the Mets), so doesn’t it stand to reason that any growth that could be attributed to those cash infusions would thus be part of the net profits Picard can go after? If Madoff investment “income” helped balance the books and helped the Wilpons draw more credit (like, say, for building a new ballpark or starting their own network), wouldn’t all that start to become part of the net profits?

        The Wilpons just keep showing that they are fairly incompetent. Their businesses rely on people forking over huge sums of money, whether it’s advertisers, season ticket holders, suite owners, Sterling investors, and they are playing with fire in terms of their reputation. They should have done whatever it took to keep their name away from Madoff in the news, and yet they seem perfectly willing to let this drag on and on and on. It sounds like they were either too stubborn to settle early, or they didn’t have the cash to settle early.

        Picard is trying to gain leverage against the Wilpons and he’s doing a pretty good job in my opinion. It’s no coincidence that this whole mess started becoming public after settlement talks broke down. Right now Picard is painting the Wilpons into a corner, where they either have to cough up more than the original settlement talks asked for, or risk going to court and having to admit that they continued investing with Madoff because they were too incompetent to do their homework and discover that he might not have been on the up and up. If they have to go to court and admit incompetence it will ruin their reputation and thus their businesses. It’s one thing for the obvious conclusion to be that they were incompetent, it’s quite another if those words actually come out of their own mouths. Sterling will be dead in the water and the pipe dream of finding a minority investor in the Mets with deep pockets becomes completely impossible and they would likely be forced to sell the Mets.

        As far as who Picard is going after and who he isn’t, I would assume he’s going after those he feels are most capable of actually paying back their profits. If someone made money with Madoff but went bankrupt or lost that money in other investments it doesn’t make much sense to waste the time and effort and legal bills going after someone who clearly can’t pay. The Wilpons can pay and Picard doesn’t care if they have to sell the Mets to do it.

      • chrisny3 - Feb 20, 2011 at 4:49 PM

        Are they going after more than net profits? Because it sounds like the Wilpons folded all their net profits back into their businesses (including the Mets), so doesn’t it stand to reason that any growth that could be attributed to those cash infusions would thus be part of the net profits Picard can go after?

        Yes, they are. I haven’t read every page of the lawsuit, but he is asking in terms of “net profits” just 300 million (out of the total 1 billion he is seeking). So even he distinguished the sums that way. As for being able to claw back monies that were made from Madoff profits, I don’t believe that is allowed under the law unless some wrongdoing can be proved. Because if you can do that with the Wilpons, then you can do that with every single investor with Madoff, including Teufel. For example, if you can show that some of the profit Teufel withdrew from Madoff went into buying a home which he later sold for a profit of 1 million, then according to you, Picard would be able to go after that 1 million. Right? Where does it end?

        Picard is trying to gain leverage against the Wilpons and he’s doing a pretty good job in my opinion. It’s no coincidence that this whole mess started becoming public after settlement talks broke down … and yet they seem perfectly willing to let this drag on and on and on. It sounds like they were either too stubborn to settle early

        He’s doing an excellent PR job in smearing Wilpon’s name. In fact, I told Craig the other day that I thought Picard’s PR skills were better than his lawyering skills. But as for your timeline, it’s wrong. Picard began his unethical leaking to the New York Times before it was reported that talks broke down. So, if he was after a settlement, it backfired. I wouldn’t be surprised if talks continued — without a mediator — had Picard not leaked details of the lawsuit to the NYT’s. I believe if anyone was stubborn here, it was Picard.

        Right now Picard is painting the Wilpons into a corner, where they either have to cough up more than the original settlement talks asked for, or risk going to court and having to admit that they continued investing with Madoff because they were too incompetent to do their homework and discover that he might not have been on the up and up.

        Huh? Do you work for Picard, lol? First, I doubt any judgment would be for more than what Picard was originally insisting on — 1 billion dollars. Second, what could happen is (a) the Wilpons win in court or on appeal on the “known or should have known” part of the suit, as well as their claim that the trustee incorrectly calculated “net profits” and end up paying a whole lot less than what Picard is demanding or (b) Cuomo is successful at knocking some sense into Picard’s lawyers and gets them to drop almost all the claims related to the “known or should have known” part, and they agree to an amount significantly less than Picard’s 1 billion. Say, 300 million at most.

        So, if it’s a corner, it’s one with many angles and exits.

        “It’s one thing for the obvious conclusion to be that they were incompetent, it’s quite another if those words actually come out of their own mouths. Sterling will be dead in the water and the pipe dream of finding a minority investor in the Mets with deep pockets becomes completely impossible and they would likely be forced to sell the Mets.”

        You don’t have to be incompetent to have been duped by Madoff. Unless you want to say everyone he duped which includes virtually all his investors — some more sophisticated than the Mets’ owners — and the SEC are all incompetent. So, no, that is not an obvious conclusion.

        Yesterday, the NY Daily News ran a story quoting the investment banker handling inquiries from potential minority investors and he said there has already been “plenty” of “serious” interest from groups or individuals, numbering in the “dozens.”

        They will only be forced to sell the whole team if a final judgment is close to what Picard was asking for. And I don’t think that will happen.

        As far as who Picard is going after and who he isn’t, I would assume he’s going after those he feels are most capable of actually paying back their profits. If someone made money with Madoff but went bankrupt or lost that money in other investments it doesn’t make much sense to waste the time and effort and legal bills going after someone who clearly can’t pay.

        Agreed. That appears to be his strategy. However, it’s sad and ironic that if you used Madoff profits wisely and responsibly, you may be penalized much more than if you used Madoff profits unwisely and recklessly and compounded one bad move with another.

        The Wilpons just keep showing that they are fairly incompetent. Their businesses rely on people forking over huge sums of money, whether it’s advertisers, season ticket holders, suite owners, Sterling investors, and they are playing with fire in terms of their reputation.

        Actually, their reputation was already harmed with the unethical PR campaign by Picard. I’m convinced they are better off fighting this thing to reclaim what they can. And, as the investment banker said, there is plenty of interest right now in buying a portion of the Mets. Also, according to Howard, ticket sales have been strong.

      • seeingwhatsticks - Feb 20, 2011 at 5:28 PM

        To quote a man many think was wise, “there you go again.” You said this stuff became public after it was reported that talks broke down, but is the date that the break down was reported the same as the date on which the breakdown occurred? My guess is that talks brokedown, Picard assumed it was a negotiating tactic, and then as days passed and the Wilpons never came back to the table the leaks started.

        Picard isn’t smearing the Wilpons, this is a PR and negotiating strategy. He’s making things so difficult and so miserable that settling on Picard’s terms would be much preferable to continuing the fight for what may take years. That’s not unethical or immoral, that’s life. That’s using the tools at your disposal on behalf of your clients, which is his job. If the Wilpons have to be shamed into paying what they should have to pay then so be it. That’s the decision they made by disengaging from the settlement talks in the first place because surely they had to know that this was coming. They chose to walk away anyway.

        There’s no way you know what Picard was asking for in settlement talks, and neither do I because neither of us was in the room or on the phone. If I had to guess, Picard laid out what he felt he could get if this thing went to trial ($1 billion) then said he could make it all go away for a much smaller number, which the Wilpons still balked at (foolishly in my opinion). That’s a pretty standard negotiating tactic. Rather than trying to negotiate that figure in good faith, the Wilpons either walked away or countered with such a low figure that there was no way negotiations could continue.

        There’s also no way interest in a minority share of the Mets, while they are still controlled and operated by the Wilpons, can possibly be strong. I am not an investment guy, and not really a businessman, and even I know that would be an insanely stupid investment. Just preposterously dumb. Why would I give the Wilpons $250 million for a 25% interest in an enterprise that turns maybe a $25 million profit per year? For my $250 million I get maybe $6 million a year? I promise you even a novice like me could do better than a 2.4% annual return with that type of cash. If I thought the Mets were a great investment, and I had a lot of money lying around, why wouldn’t I just wait until this plays out to see if the Wilpons have to sell the controlling interest? If Picard gets his ruling or leverages this mess into a big settlement figure there’s a chance I can get the Mets for significantly less in a year or two than I could right now. No one is going to invest with the Wilpons, either through the Mets or through Sterling, until this is all sorted out and that’s going to make it very difficult for them to continue paying off the debt they have right now.

        I agree that from where we are now the best course of action for the Wilpons is to fight this and hope they come out on top (though I don’t think that is nearly as likely as you seem to think it is). However, the best course of action from the beginning would have been to settle this as quickly and quietly as possible, even if the Wilpons had to spend more then they thought they should have to in order to get it done. In my opinion, the cost of whatever they would have had to hand over pales in comparison to the damage done by all of this being made public. Like I said, they were either stubborn, unable to pay, or got some of the worst legal and PR advice of all time. Companies settle suits all the time, even when they do not believe they are liable, because the damage done by a trial is far worse than the damage done by a quiet settlement. That’s what should have happened here.

        One final thing that I find very interesting. You seem to put a lot of faith in what the Daily News says and almost none in what the Times has to say. If the Times is getting its info from Picard, and the Daily News is getting their info from the Wilpons, wouldn’t the most reasonable position be that the truth lies somewhere in between?

      • chrisny3 - Feb 20, 2011 at 5:29 PM

        One more point about “people forking over money.”

        If the team wins, people will come and advertisers will buy — because ratings will also be good — regardless of Madoff.

        If the team loses, people will not come and advertisers might cut back — regardless of Madoff.

        The Wilpons’ reputation has very little direct impact on the profits of SNY and the team. Winning is the bottom line for cash flow.

      • seeingwhatsticks - Feb 20, 2011 at 5:38 PM

        You’re right about winning but how are they supposed to win? The team is expensive and no good. The farm system is pretty empty. The Wilpons may not have any money to spend on the team any time soon, so as big contracts expire they won’t be replaced by any great players. If the Yankees keep spending and competing and the Mets become the big city Pirates advertisers will bolt, ratings will tumble, and fans will stop showing up.

      • chrisny3 - Feb 20, 2011 at 6:08 PM

        Instead of making blanket statements about the team’s chances and it’s farm system, can you back that up with any facts, stats, expert opinions or rankings? Just your saying things doesn’t make it so.

        And a lot of contracts are coming off the books after this season. The Mets will plow most of that back into the payroll. And we all know that big fat payrolls aren’t the only answer to winning — just look at the fortune the Yankees have spent over the last decade with relatively little returns. It’s not how much you spend. It’s how you spend it that counts.

        BTW, don’t miss my long reply to your previous statement at the end. I meant to put it right here under the your reply, but when I logged in, it put it at the end.

      • chrisny3 - Feb 20, 2011 at 6:14 PM

        Here’s a question for you: If a team’s farm system is ranked somewhere in the middle by qualified experts, is it empty?

        Interested in your reply.

      • seeingwhatsticks - Feb 20, 2011 at 6:15 PM

        So you don’t doubt what the Times is saying, you just don’t like it? Well that makes so much more sense.

        You’re absolutely right about franchise valuation, but the Mets are swamped in debt and are still being run by a fairly incompetent set of owners so how does that value go keep going up? They’ve already gotten the boost from the new staidum and the new network so basically any investor would be buying high in the hopes that the value gets higher. Rich people don’t get rich by making decisions like that. And you’re also ignoring that if you wanted to ever get that money back (and thus realize your return on the valuation part of your investment) you’d have to find someone that wanted to buy it from you. That’s not going to be the Wilpons or else they wouldn’t be looking to sell the share in the first place.

        As far as the team goes, sure they have contracts coming off the books, but where do you get the idea they will reinvest that money in better players? If the Wilpons need money they’re going to put that money back into the team rather than paying off some of their debt (or paying off the Madoff trustees)? That’s a pretty big leap of faith you’re taking there.

        The Mets have 1 player in Keith Law’s top 50 prospect rankings (Wilmer Flores all the way at 48) and as an organization he ranks them at 26. So by all means, count on that farm system to produce the next wave of great Mets teams.

      • seeingwhatsticks - Feb 20, 2011 at 6:19 PM

        One other thing about the product on the field. Scouting costs money. Signing international players and high draft picks costs money. Unlike free agent players, who can help sell tickets and generate tv ratings, those international and college players aren’t likely to help the team for a few years. If the Wilpons have money problems, how exactly are they going to make those kinds of long term investments in the franchise? You can win a couple of ways in baseball, and I give Alderson credit for having had some success without a huge payroll. At the end of the day though winning costs money and ao the question becomes about where and how you want to spend that money, not if you want to spend it.

      • chrisny3 - Feb 20, 2011 at 7:17 PM

        So you don’t doubt what the Times is saying, you just don’t like it?

        No. I didn’t say that. Can you not distinguish between statements of fact in a story vs. the spin around those statements of fact (ie, headlines, failure to get opposing views, how a reporter interprets what a person he interviews says, using only partial quotes or the quotes that fit your story)?

        What I said is I have no reason to believe either the NYT’s or DN were incorrect in their facts. What I disagree with is the NYT’s “spin” and the way they covered the facts. How they couched them. And the fact that they were too willing to be Picard’s mouthpiece.

        You’re absolutely right about franchise valuation, but the Mets are swamped in debt and are still being run by a fairly incompetent set of owners so how does that value go keep going up?

        There are and/or have been franchises swamped in as much debt (or more) than the Mets — the Yankees, Giants, D-Backs, Rangers among them. That doesn’t prevent a MLB franchise from rising in valuation.

        And you’re also ignoring that if you wanted to ever get that money back (and thus realize your return on the valuation part of your investment) you’d have to find someone that wanted to buy it from you. That’s not going to be the Wilpons or else they wouldn’t be looking to sell the share in the first place.

        Who’s ignoring it? LOL. I’m not. If there’s hight interest in the Mets now, when they have a lawsuit hanging over their heads, imagine how much there would be when that lawsuit is over with??? And who says down the road — say 10 years from now — the Wilpons, in a better financial position than they are in currently, don’t decide to buy back the rest of the club? I don’t see why not. They did it once before. But why would they even need to if they already have a controlling interest? The Steinbrenners only own 32% of the Yankees.

        “..but where do you get the idea they will reinvest that money in better players?”

        Where do you get the idea they won’t? If the Wilpons need money, they will sell a part of the team. It won’t impact the payroll. Any other scenario is a leap in itself.

        The Mets have 1 player in Keith Law’s top 50 prospect rankings (Wilmer Flores all the way at 48) and as an organization he ranks them at 26.

        Ahh, you avoided my question. I’ll ask again. If I show you a recent detailed ranking that has the Mets in the middle of the pack, does that mean their farm system is still empty? Inquiring minds want to know.

        Scouting costs money. Signing international players and high draft picks costs money… If the Wilpons have money problems, how exactly are they going to make those kinds of long term investments in the franchise?

        There is no indication the Wilpons are in a situation right now where they can’t afford to spend on the draft or farm system like they’ve always done. So until there is an indication they can’t or won’t, any suggestion to the contrary is a big leap and simply speculation. What’s the point of speculating? We can do that all day and get nowhere. Here’s my speculation: What if within the next year, the Wilpons beat the Picard lawsuit for the most part, end up only paying 100-250 million (or less), take in a minority investor, do better than expected on the field, and have a great year at the gate and at SNY? Seems plausible to me. (Though I think the most likely scenario in terms of Madoff is NOTHING gets resolved till 2012 , in which case there is ZERO financial impact on the Mets in 2011.)

      • seeingwhatsticks - Feb 20, 2011 at 7:54 PM

        To be honest I’m really bored of this conversation. I just produced a quality talent evaluator who doesn’t think very highly of any Mets prospects individually or as a whole, and you just completely ignored it. It’s clear you zero in on the things you agree with and preach them as gospel while completely disregarding everything else. But I’ll take your challenge, go ahead and produce something that says the Mets farm system is in the upper half of the league. I’ll be waiting for the link from newyork.mets.mlb.com and/or some Mets bloggers.

      • chrisny3 - Feb 20, 2011 at 8:26 PM

        If you’re really bored, why are you still here? Very strange behavior for someone who professes to be bored.

        If find it very hypocritical of you to complain that I ignored your Keith Law reference when you first ignored my very pointed question which essentially said there was a ranking, by qualified experts, who rank the Mets farm system in the middle of the pack. I only ignored your KL reference because you chose to first ignore my point about the ranking I brought up. Practice what you preach.

        I don’t disregard facts or things that people actually say (ie, a quote from a newspaper). I ignore idle speculation such as yours as (a) speculation is not fact or reality and (b) it’s really pointless as we can all speculate all day and all year long and go round and round and go absolutely nowhere. It’s a big waste of time. If you have something factual you want me to comment on, I will, just so long as you’ve not ignored one of my related comments first as you did above.

        I’ll be waiting for the link from newyork.mets.mlb.com and/or some Mets bloggers

        Hey, hold your breath. Please.

        Here’s the ranking, not from a Mets blogger or mets.com. Boy, how foolish you look:

        http://baseballnumbers-diamondfutures.blogspot.com/2011/02/team-14-new-york-mets.html

        Mets are ranked #14 out of 30.

      • seeingwhatsticks - Feb 20, 2011 at 8:31 PM

        When did I ignore your claim about the farm system? I responded with Keith Law’s individual and organizational rankings. Not sure if you actually read this link that you provided but the very first line is, “I am not sure that there is any team in baseball that is more in disarray than the New York Mets. ” So if you’re keeping score that’s #1 in disarray, #14 in prospects (according to this site).

        I’m bored because you keep making the same points over and over: nothing to see here, all is well, move along move along, please disperse, nothing to see here, ALL IS WELL.

      • chrisny3 - Feb 20, 2011 at 9:14 PM

        See my 6:08 pm comment right above.

        I asked you a question, the inference of which contradicts your previous statement that the Mets farm system is “empty.” You totally ignored the question.

        Of course I read the link. Whether or not the organization is in disarray is totally irrelevant to whether or not the farm system is empty or full or half-empty. (Nor does it have anything to do with whether or not there are financial resources available for the team.) Nice of you to try to go off on a tangent, now that I’ve shown that people who know much more about baseball than you pretend to disagree with you.

        If I keep making the same points over and over, what do you think you’re trying to do? The sad part is you keep on trying, even after you’re proven wrong (ie, the timeline of Picard’s unethical PR campaign and the breaking off of negotiations). And most of your points are your own speculation vs. reality or facts. As I said, we can all speculate all day long. Big deal.

        And stop saying you’re so bored. Prove it. I think you know how.

      • seeingwhatsticks - Feb 20, 2011 at 9:16 PM

        Again, how is producing the Keith Law rankings ignoring your question about farm system? I answered, just not immediately because I didn’t realize there was any debate about the quality (or lack thereof) within the Mets farm system.

        I can hear it now, the chants ringing throughout Citi Field, crowd going absolutely bonkers: We’re number 14! We’re number 14! We’re number 14!

      • chrisny3 - Feb 20, 2011 at 9:28 PM

        LOL, still here? After so much boredom? Wow. Apparently you love to be bored!

        How is referencing KL answering my question to you? I don’t see how it does.

        And why would Citi Field fans be chanting about something you were wrong about????

      • seeingwhatsticks - Feb 20, 2011 at 9:33 PM

        You said:

        Instead of making blanket statements about the team’s chances and it’s farm system, can you back that up with any facts, stats, expert opinions or rankings? Just your saying things doesn’t make it so.

        Keith Law is an expert and I came back with his opinion and rankings. That’s how I responded. You don’t agree so you just ignored his opinion and rankings and went in search of your own.

        And I’m still here because somehow the NBA All-Star game is actually even more boring than this conversation.

      • chrisny3 - Feb 20, 2011 at 10:54 PM

        No, no, no …

        I said first, before you put in your KL reference:

        “Here’s a question for you: If a team’s farm system is ranked somewhere in the middle by qualified experts, is it empty?”

        Then I specifically asked you for a reply to this.

        That was at 6:14 PM. Sorry, not 6:08. But if you had bothered to read correctly form the beginning, you would have seen this.

        Doesn’t matter what’s more boring or not than this. If this is boring, why are you still here at all? Is your life so vacuous that you can’t find anything to interest yourself?

  7. chrisny3 - Feb 20, 2011 at 6:00 PM

    You said this stuff became public after it was reported that talks broke down,

    Uh, no I didn’t. What part of “Picard began his unethical leaking to the New York Times before it was reported that talks broke down” don’t you understand?

    Picard isn’t smearing the Wilpons, this is a PR and negotiating strategy. He’s making things so difficult and so miserable that settling on Picard’s terms would be much preferable to continuing the fight for what may take years. That’s not unethical or immoral, that’s life.

    Sure he’s smearing them. He’s making wrongful allegations that they did something wrong. He’s overreaching. And what was unethical was his leaking information in papers under court seal to the NYTs. I’m guessing that’s against the law. If his goal is to settle, he failed miserably. The Wilpons had a chance to settle on his terms and told him to shove it. They believe it is much more preferable to take their chances with either a mediator, the judge, a jury or the appeals court. I believe they are right.

    There’s no way you know what Picard was asking for in settlement talks

    Picard’s lead lawyer was quoted in the press as saying they are not settling at this point for less than a billion. Need a link?

    There’s also no way interest in a minority share of the Mets, while they are still controlled and operated by the Wilpons, can possibly be strong.

    LOL, so you’re calling Steve Greenberg from Allen & Co. a liar? Well, that’s your choice. You are neither on the inside nor an investment banker. Until anything concrete comes out to the contrary, I say he is telling the truth. I think anyone who would pretend to know better is “preposterously dumb.”

    Why would I give the Wilpons $250 million for a 25% interest in an enterprise that turns maybe a $25 million profit per year?

    Even though you’re wrong about the level of interest, I’ll humor you anyway.

    You have just proved very well why you lack any investment savvy. You don’t invest in a MLB team just for any potential annual profits, you do it for the long-term rise in valuation. You know, like how the Mets valuation has risen significantly since the Wilpons became sole owners.

    However, the best course of action from the beginning would have been to settle this as quickly and quietly as possible

    Well, as I said, it appears the Wilpons wanted to settle but Picard was too stubborn and unethically embarked on a smear and PR campaign while talks were going on.

    You really need to step back, because a lot of your argument and rant rests on your incorrect recollection of the timeline. Again, the leaked info and resulting stories came BEFORE the talks broke down. You can look it up.

    Companies settle suits all the time, even when they do not believe they are liable, because the damage done by a trial is far worse than the damage done by a quiet settlement.

    Sometimes. Sometimes not. I believe this case will fall into “sometimes not” if it is settled in court.

    “One final thing that I find very interesting. You seem to put a lot of faith in what the Daily News says and almost none in what the Times has to say. If the Times is getting its info from Picard, and the Daily News is getting their info from the Wilpons, wouldn’t the most reasonable position be that the truth lies somewhere in between?”

    I don’t doubt the statement of facts as reported by either paper. What I don’t like is the spin that one of the papers has adopted. And the fact that they were so willing to be a voice for Picard’s unethical PR campaign and leaking. Remember, there were no statements by the Wilpons lawyers reported by the Daily News UNTIL talks had already broken down. If only Picard had had such scruples. Then they might still be talking (without a mediator).

  8. Chris Fiorentino - Feb 20, 2011 at 10:03 PM

    Didn’t Madoff prepare legitimate “looking” financial statements for his clients? Didn’t Madoff pretend to be making this money for his “clients” legitimately? If his clients did not have any reason to think he was lying, then where is it the responsibility of his clients to pay back monies they legitimately thought they were earning as profits on their legitimate investments???

    Again, just because it turned out that Madoff wasn’t Vanguard or Fidelity doesn’t mean that the same situation could not occur. if a Vanguard employee decided to do something illegal and started making his/her own statements on Vanguard paper, then proceeded to run a billion dollar ponzi scheme and defrauded some out of billions while paying some people, who would ultimately be responsible? Would I have to pay back the $50,000 I earned the last three years? I have paperwork, which I am sure Teufel has as well. I am sure when Teufel received his paperwork, he thought it was legit, and did himself a crazy check dance while thinking of how he is going to spend his profits on his money. Obviously, nobody disagrees that Teufel had no reason to think that money he earned was dirty.

    Why then is it HIS responsibility to pay the money back? Why is it not the responsibility of Madoff and his estate to pay the money back? You people are looking in the wrong place. As I said before…the Wilpons are being accused of knowing, or should have been knowing, that Madoff was crooked. Teufel is a legitimate guy, who legitimately thought he earned the money. How you go after him is ridiculous, a disgrace, and should make everyone who invests their money anywhere a little scared.

    • Reflex - Feb 21, 2011 at 1:04 AM

      It dosen’t matter what he produced. The law does not work that way. Stolen property is stolen property. And if it was your stolen money, you’d be going after him just as strongly.

      And once again, if Vanguard or Fidelity had committed fraud as Madoff did, the state would be going after those who profited from it exactly the same as they are from Madoff. What counts is not who people were ‘investing’ with, what counts is that there were no actual investments.

      • chrisny3 - Feb 21, 2011 at 10:11 AM

        The law is not so cut-and-dried on this matter. If you are an innocent investor in a ponzi scheme, and have actual printed statements with real securities listed on it, then SIPC considers those statements as valid for reimbursement under their program. For example, Teufel would actually be eligible to receive up to $500,000 in reimbursement for his Madoff account, even though he had net profits.

        The problem is that Picard and the bankruptcy judge (with the urging of SIPC) have amended the rules somewhat because the scam was so massive in this case (and hence SIPC’s liability would be massive). Their definition made only those with net losses eligible for reimbursement. As a result, some of the investors who had net gains but paper losses with Madoff (like Teufel and even the Wilpons) filed a suit against Picard and the court demanding they operate under the old guidelines. I am not sure what the status of that lawsuit is, but I have a feeling it is still in litigation or at the appeals court level.

        Bottom line is that there is truth to the argument and a basis in law that paper statements should be considered as valid for issues of determining net equity and reimbursement — even in a ponzi scheme. Which is why I said earlier that “rightful owners” is not so cut and dried in this case. Put another way — both sides on this particular issue of “paper statements” in this thread are right to some degree as there is no clarity in the law on this at the moment.

Leave Comment

You must be logged in to leave a comment. Not a member? Register now!

Featured video

Who are the favorites for Rookie of the Year?
Top 10 MLB Player Searches
  1. J. Soler (3751)
  2. Y. Molina (3491)
  3. R. Castillo (3406)
  4. D. Wright (2340)
  5. D. Murphy (2244)
  1. B. Colon (2208)
  2. B. Posey (2194)
  3. S. Doolittle (2172)
  4. D. Ortiz (2133)
  5. T. Lincecum (2065)